Synopsis: To develop a clearly defined digital strategy across all aspects of business — from channels & processes to data, operating model, workforce management and culture
Digital transformation is no longer a choice but a necessity for businesses across sectors and sizes. Companies looking to implement such changes need to have leaders who are capable of spearheading the initiatives.
The managers should be able to spearhead the initiatives as well as be able to visualise the challenges, come up with solutions and implement them smoothly. The leaders have to play various roles to bring about these changes.
Key leadership skills needed
Harold D’Souza, Co-founder and Director, and Vidya Venkataramani, Senior Consultant, WalkWater Talent Advisors, list five leadership skill sets that can make the transformation seamless:
To develop a clearly defined digital strategy across all aspects of business — from channels & processes to data, operating model, workforce management and culture
To do a thorough business analysis, both internally and externally, to add significant value to the company’s bottom line in the near term, while keeping the long-term perspective in mind; communicating this vision effectively to the C-suite & other functional leaders
To understand the business requirements and generate innovative digital solutions for services, processes, capabilities and customer experience. Identify tools such as the cloud, big data analytics, artificial intelligence and machine learning, orchestration/automation to enhance services and client satisfaction
To identify digital capabilities and solutions to invest, thereby developing seamless and agile customer interactions, analytics capabilities to understand customer needs and innovative mechanisms to deliver the different services
To build networks of people, technologies and ideas far outside of their company, constantly scanning the small-business landscape to identify possible acquisitions or partners that can provide complementary capabilities
Uday Chawla, Managing Partner of TRANSEARCH India Office, says that leaders’ ability to understand, learn, act and inspire change within their organisations is critical to harness the full potential of digital technologies.
“In today’s dynamic business environment, one of the critical stepping stones to becoming change agents of effective digital transformation is continuous learning and adaptation. Progressive leaders recognise the importance of staying updated on the latest trends and innovations in the digital realm. They seek to identify opportunities and challenges, correlating them with their specific business needs to formulate informed strategies and actions,” says Chawla.
Differences based on company size and sector
D’Souza and Venkataramani are in agreement that the implementation strategies would differ based on the size and nature of the organisation. SMEs often have tighter budgets and fewer resources than larger enterprises. This may mean small businesses need a more focused approach to digital transformation, prioritising high-impact initiatives. SMEs tend to be more agile and can often implement digital changes more quickly. They have less bureaucracy and fewer decision-making layers.
Larger companies, on the other hand, have multiple business units and so may face challenges in standardising digital practices. They may need to tailor the strategies for each division’s specific needs. Large enterprises may have extensive legacy systems that need to be integrated or modernised for digital transformation.
For example, the experts at WalkWater Talent Advisors say, a large manufacturing conglomerate might invest in Industry 4.0 technologies like IoT and automation to optimise production. A multinational corporation might implement a unified enterprise resource planning (ERP) system for better coordination across global operations, or invest in futuristic technologies like AI to create customer experience centres. One MNC locomotive manufacturer had spoken about how it created customer digital experience centres where buyers could see the locomotives using augmented reality, add the duo.
Commonalities and differences by sector
Technology companies are often seen to be at the forefront of digital transformation. Their focus may be on developing cutting-edge products and services, leveraging AI and machine learning, and continuously innovating to stay competitive.
Chawla says, “Take, for example, the rapidly evolving field of artificial intelligence (AI). It’s common knowledge that AI plays a pivotal role in the survival and success of businesses today. However, the true difference lies in how leaders approach AI. Being aware of AI’s potential is only the first step. Effective leaders distinguish themselves by actively pursuing learning, implementing AI strategies, and ensuring that these innovations are integrated into their business operations seamlessly.”
Other industries are also transforming in their own ways, say D’Souza and Venkataramani. Industries like manufacturing often have complex supply chains and heavy reliance on operational technology. Digital transformation here might involve implementing IoT sensors for predictive maintenance, adopting robotics and optimising logistics. In the financial sector, security and compliance are paramount. Digital transformation may focus on improving customer experiences through mobile banking apps, implementing AI-driven fraud detection and enhancing data security measures. The healthcare sector is increasingly adopting digital technologies for telemedicine, electronic health records and patient engagement platforms to improve accessibility and patient outcomes.
The mandate and the metrics
According to D’Souza and Venkataramani, the mandate for overseeing digital transformation typically falls under the purview of the chief digital officer (CDO) in the CXO team. The responsibility for digital initiatives can also be distributed among other CXO roles depending on the organisation’s structure and industry. For example, the chief information officer (CIO) may play a significant role in digital transformation in some companies, particularly if there is a strong focus on technology infrastructure and systems. Additionally, the chief marketing officer (CMO) may lead digital efforts with a strong emphasis on customer engagement and marketing technologies. So the division of responsibilities can vary from one organisation to another.
Chawla points out that leaders should establish key performance indicators (KPIs) and metrics to measure the impact of digital transformation efforts.
D’Souza and Venkataramani list some of the metrics as customer satisfaction and experience, based on surveys, net promoter scores (NPS) and customer feedback; market share growth; revenue and profitability from introduction of new lines of digital businesses; time-to-market for products and services; and internal metrics such as employee engagement and productivity, data-driven decision making, reduction in IT incidents and downtime, compliance and security measures
They state that challenges can arise from resistance to change, lack of strategy road maps, process issues, as well as product and tech issues.
Chawla says leaders must embrace change, cultivate a culture of innovation, encourage their teams to adapt and adopt digital solutions and strategies. Furthermore, they should lead by example, showcasing their commitment to digital transformation through their own actions and decision-making processes.
Source: The Economic Times